BILL NUMBER: SB 1121	CHAPTERED  10/10/99

	CHAPTER   637
	FILED WITH SECRETARY OF STATE   OCTOBER 10, 1999
	APPROVED BY GOVERNOR   OCTOBER 5, 1999
	PASSED THE SENATE   SEPTEMBER 8, 1999
	PASSED THE ASSEMBLY   SEPTEMBER 3, 1999
	AMENDED IN ASSEMBLY   SEPTEMBER 1, 1999
	AMENDED IN ASSEMBLY   AUGUST 30, 1999
	AMENDED IN ASSEMBLY   AUGUST 18, 1999
	AMENDED IN ASSEMBLY   JULY 13, 1999
	AMENDED IN ASSEMBLY   JUNE 28, 1999

INTRODUCED BY   Senator Alarcon
   (Coauthor:  Assembly Member Lowenthal)

                        FEBRUARY 26, 1999

   An act to amend Section 8869.83 of the Government Code, and to
amend Sections 50880, 50881, 50881.5, 50882, and 50888.3 of, to add
Chapter 6.7 (commencing with Section 50675) to Part 2 of Division 31
of, and to repeal Sections 50887, 50888.5, 50888.7, 50889.5, 50893.5,
50893.7, and 50893.9 of, the Health and Safety Code, relating to
housing, and making an appropriation therefor.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1121, Alarcon.  California Debt Limit Allocation Committee:
rental housing.
   (1) Existing law establishes the membership of the California Debt
Limit Allocation Committee and requires the Treasurer to serve as
the chairperson of the committee and requires the office of Treasurer
to provide any administrative assistance and support staff that is
needed for the committee to operate.
   This bill would also require the office of Treasurer to provide an
executive director for the committee and would authorize the
committee to authorize the executive director to enter into contracts
on behalf of the committee.
   (2) Existing law establishes various programs under the Department
of Housing and Community Development, including the California
Housing Rehabilitation Program for the development of low-income and
multifamily rental housing in the state.
   This bill would create the Multifamily Housing Program under the
department to provide a standardized set of program rules and
features applicable to all housing types based on the existing
California Housing Rehabilitation Program.  The bill would provide
financial assistance in the form of a deferred payment loan to fund
projects for, among other things, the development and construction of
new, and rehabilitation, or acquisition and rehabilitation, of
existing, transitional or rental housing developments.  The bill
would establish a project selection process for loans for these
projects.
   The bill would also require a regulatory agreement between the
department and the housing sponsor and would set up a default reserve
fund to protect the department's security interest in any project
funded under these provisions.
   (3) Existing law establishes the Families Moving to Work Program
administered by the Department of Housing and Community Development
as a component of the Rental Housing Construction Program.
   This bill would require the Families Moving to Work Program to be
administered as a component of the Multifamily Housing Program, and
would make related changes.  The bill would require specified funds
transferred by the Budget Act of 1999 to the Housing Rehabilitation
Loan Fund to be used for the Multifamily Housing Program.  Because
that fund is continuously appropriated for specified purposes, this
bill would make an appropriation by expanding the purposes of the
fund.
   (4) Existing law contains provisions relating to assisting the
development of community housing developments.
   This bill would repeal those provisions.
   Appropriation:  yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 8869.83 of the Government Code is amended to
read:
   8869.83.  (a) There is in state government the California Debt
Limit Allocation Committee, consisting of six members as follows:
   (1) The Treasurer, or his or her designee.
   (2) The Controller, or his or her designee.
   (3) The Governor, or his or her designee.
   (4) The Director of Housing and Community Development, who shall
be a nonvoting member.
   (5) The Executive Director of the California Housing Finance
Agency, who shall be a nonvoting member.
   (6) A representative from local government who shall be a
nonvoting member, selected by two voting members of the committee.
   (b) The Treasurer shall serve as chairperson of the committee and
the office of the Treasurer shall provide an executive director and
any administrative assistance and support staff that is needed for
the committee to operate.  The chairperson shall keep, or cause to be
kept, minutes and other records and documents of the committee.  The
committee may authorize the executive director to enter into
contracts on behalf of the committee.
   (c) Members of the committee shall serve without compensation.
   (d) Two voting members of the committee shall constitute a quorum.
  The affirmative vote of two voting members of the committee shall
be necessary for any action taken by the committee.  However, the
committee may, by unanimous vote, delegate to its chairperson the
authority to carry out any acts empowered to it under this chapter.

  SEC. 2.  Chapter 6.7 (commencing with Section 50675) is added to
Part 2 of Division 31 of the Health and Safety Code, to read:

      CHAPTER 6.7.  MULTIFAMILY HOUSING PROGRAM

   50675.  The Legislature finds and declares all of the following:
   (a) Large numbers of California's renters face excessive housing
costs and live in overcrowded or substandard units.  Many of these
renters also have special housing needs arising from their employment
status, age, or disability, and live in communities suffering from a
lack of investment.
   (b) In previous years, the state has attempted to address the
needs of California renters through a series of small programs
operated by the Department of Housing and Community Development, each
offering financing targeted at a specific population or building
type.  These programs were typically highly successful in addressing
local housing and community development needs.  However, because each
individual program came with a unique set of rules, the programs
were often costly and time consuming to administer, for both the
state and program users.
   (c) A more efficient method to address renter housing needs would
be to operate one omnibus multifamily housing program modeled upon an
existing successful program.  This omnibus program would provide a
standardized set of program rules and features applicable to all
housing types.  As particular needs are identified, it may be easily
and quickly customized to meet those needs.
   (d) It is the intent of the Legislature that the Multifamily
Housing Program created by this chapter constitute this omnibus
multifamily housing program, and that it be based on the department's
existing California Housing Rehabilitation Program as established
and described in Subchapter 8 (commencing with Section 7670) of
Chapter 7 of Part 1 of Title 25 of the California Code of
Regulations.
   (e) The Multifamily Housing Program is intended to take the place
of the following department programs:
   (1) The Deferred-Payment Rehabilitation Loan Program established
by Chapter 6.5 (commencing with Section 50660).
   (2) The Rental Housing Construction Program established by Chapter
9 (commencing with Section 50735).
   (3) The Family Housing Demonstration Program established by
Section 5 of Chapter 30 of the Statutes of 1988.
   Repeal of the statutes establishing these programs would be
administratively problematic because the department still administers
a portfolio of loans from these programs.  Therefore, in lieu of
repeal, it is the Legislature's intent that no further allocation of
funds be made to these programs and that any and all future funds
that would have been appropriated to these programs shall be
appropriated instead to the Multifamily Housing Program.
   50675.1.  (a) This chapter shall be known and may be cited as the
Multifamily Housing Program.
   (b) Assistance provided to a project pursuant to this chapter
shall be provided in the form of a deferred payment loan to pay for
the eligible costs of development as hereafter described.
   (c) This chapter shall be administered by the department and the
department shall establish the terms upon which loans may be made
consistent with the provisions of this chapter.
   50675.2.  The definitions of this section shall apply to all
activities conducted pursuant to this chapter.  Except as otherwise
provided in this chapter, or unless the context requires otherwise,
the definitions contained in Chapter 2 (commencing with Section
50050) of Part 1 shall also apply to this chapter.
   (a) "Affordable rent" shall be established by the department to be
consistent with the rent limitations imposed by the Low Income
Housing Tax Credit Program, as administered by the California Tax
Credit Allocation Committee.
   (b) "Assisted unit" means a unit that is affordable to a lower
income household as a result of a loan provided pursuant to this
chapter.  In order to ensure consistency with the Low Income Housing
Tax Credit Program, occupancy of assisted units shall be limited to
households whose income does not exceed the limits specified by the
California Tax Credit Allocation Committee.
   (c) "Maintain affordable rent levels" means rents may be increased
by the sponsor on an annual basis in the amount that would be
allowed if the project was subject to the requirements of the Low
Income Housing Tax Credit Program established pursuant to Section 42
of the federal Internal Revenue Code.
   (d) "Rental housing development" means a structure or set of
structures with common financing, ownership, and management, and
which collectively contain five or more dwelling units, including
efficiency units.  No more than one of the dwelling units may be
occupied as a primary residence by a person or household who is the
owner of the structure or structures.
   (e) "Rehabilitation," in addition to the meaning set forth in
Section 50096, includes improvements and repairs made to a
residential structure acquired for the purpose of preserving its
affordability.
   (f) "Rent-up costs" means costs incurred while a unit is on the
housing market but not rented to its first tenant.
   (g) "Sponsor" has the same meaning as defined in subdivision (c)
of Section 50669, and also includes a limited partnership in which
the sponsor or an affiliate of the sponsor is a general partner.
   (h) "Transitional housing" and "transitional housing development"
means buildings configured as rental housing developments, but
operated under program requirements that call for the termination of
assistance and recirculation of the assisted unit to another eligible
program recipient at some predetermined future point in time, which
shall be no less than six months.
   50675.3.  Any moneys appropriated and made available by the
Legislature for the purposes of this chapter and all moneys received
by the department in repayment of loans made pursuant to this
chapter, including interest and payments in advance in lieu of future
interest, shall be deposited in the Housing Rehabilitation Loan Fund
established by Section 50661.  These moneys shall be used for the
purposes of this chapter, including the implementation and operation
of the program created by this chapter, and the administrative
expenses of the department shall not exceed 5 percent of the funds
appropriated by the Legislature for the purposes of this chapter.
   50675.4.  (a) To be eligible to receive a loan, a proposed project
shall involve one or more of the following activities:
   (1) The development and construction of a new transitional or
rental housing development.
   (2) The rehabilitation, or acquisition and rehabilitation, of a
transitional or rental housing development.
   (3) The conversion of a nonresidential structure to a transitional
or rental housing development.
   (b) In the case of rehabilitation projects, to be eligible to
receive a loan, the loan shall be necessary to avoid increases in
monthly debt service that have either of the following effects:
   (1) Result in rent increases causing permanent displacement of
persons of lower income residing in the development prior to
rehabilitation.
   (2) Make it economically infeasible to accept subsidies available
to provide affordable rents to persons of lower income, if the
sponsor agrees to accept the subsidies.
   (c) To be eligible to receive a loan, the sponsor shall agree to
set and maintain affordable rent levels for assisted units.
   50675.5.  (a) Eligible costs shall include the cost of developing
dwelling units, transitional housing, and child care, and after
school care and social service facilities integrally linked to the
assisted dwelling units.
   (b) Eligible cost categories shall include all of the following:
   (1) Real property acquisition, including refinancing of existing
debt to the extent necessary to reduce debt service to a level
consistent with the provision of affordable rents and the fiscal
integrity of the project.
   (2) New construction or rehabilitation, including the conversion
of nonresidential structures to residential use.
   (3) General property improvements that are necessary to correct
unsafe, unhealthy, or unsanitary conditions, including renovations
and remodeling, including, but not limited to, remodeling of kitchens
and bathrooms, installation of new appliances, landscaping, and
purchase or installation of central air conditioning.
   (4) Necessary and related onsite and offsite improvements.
   (5) Reasonable developer fees.
   (6) Reasonable consulting costs.
   (7) Initial operating costs for housing units.
   (8) Capitalized reserves for replacement and operation.  The
department may allow capitalized operating reserves to be used for
rent subsidies for assisted units reserved for occupancy by
households with incomes below limits determined by the department,
which shall not exceed the income limit for very low income
households.
   (9) Any other costs of rehabilitation or new construction
authorized by the department.
   50675.6.  (a) A sponsor may apply for loans for one or more rental
or transitional housing developments.  A housing development may
utilize any combination of federal, state, local, and private
financial resources necessary to make the development affordable, for
the term of the state's regulatory agreement, to the eligible
households.
   (b) (1) Loans made pursuant to subdivision (f) of Section 50675.7
to sponsors by a local public entity as part of its code enforcement
efforts for rental housing developments involving rehabilitation
shall only be for terms of not less than 20 years.  All other loans
shall be for a term of not less than 55 years.
   (2) The term of a loan and the time for repayment may be extended
for additional 10-year terms as long as the rental housing
development is operated in a manner consistent with the regulatory
agreement and the sponsor requires an extension in order to continue
to operate in a manner consistent with this chapter.
   (c) Principal and accumulated interest is due and payable upon
completion of the term of the loan.  The loan shall bear simple
interest at the rate of 3 percent per annum on the unpaid principal
balance.  The department may forgive that portion of that loan that
is used to cover costs of developing child care facilities.  The
department shall require annual loan payments in the minimum amount
necessary to cover the costs of project monitoring.  For the first 30
years of the loan term, the amount of the required loan payments
shall not exceed forty-two hundredths of 1 percent (.42%) per annum.

   (d) The department may establish maximum loan-to-value
requirements for some or all of the types of projects that are
eligible for funding under this chapter.
   (e) The department shall establish per-unit and per-project loan
limits for all project types.
   50675.7.  Loans shall be provided using a project selection
process established by the department that meets all of the following
requirements:
   (a) To the extent feasible, this process shall be coordinated with
the processes of other major housing funding sources, including that
of the California Tax Credit Allocation Committee, and shall ensure
a reasonable geographic distribution of funds.
   (b) The process shall require that applications for projects meet
minimum threshold requirements, including, but not limited to, all of
the following:
   (1) The proposed project shall be located within reasonable
proximity to public transportation and services.
   (2) Development costs for the proposed project shall be reasonable
compared to costs of comparable projects in the local area.
   (3) The proposed project shall be feasible.
   (4) The sponsor shall have the capacity to own and develop the
proposed project.
   (c) Projects that meet threshold requirements shall be evaluated
for funding based on weighted underwriting and evaluative criteria
that give consideration to projects that meet the following criteria:

   (1) Serve households at the lowest income levels, consistent with
long-term feasibility, considering regional variations.
   (2) Address the most serious identified local housing needs.
   (3) Will be developed and owned by entities with substantial and
successful experience.
   (4) Contain a significant percentage of units for families or
special needs populations.
   (5) Leverage other funds in those jurisdictions where they are
available.
   (d) The department may establish alternate project selection
processes, threshold requirements, and priorities for funds
appropriated for special purposes.  These alternate processes,
requirements, and priorities shall be tied to the specific needs and
objectives for which the funds have been appropriated.
   (e) Loans for rental housing developments and transitional housing
may be reviewed, approved, and funded by the department directly to
the sponsor.  The department shall ensure that the sponsor notifies
the local legislative body of the sponsor's loan application prior to
application submission.
   (f) The department may make grants to local public entities using
funds reserved by the Legislature for rehabilitation, or acquisition
and rehabilitation, in support of code enforcement.  The local
entities shall then make the funds available as loans, and they may
be allowed to collect and retain loan repayments, provided that these
repayments are reloaned in accordance with the requirements of this
chapter, as it relates to funds used in support of code enforcement.

   50675.8.  (a) Prior to disbursement of any funds for loans to
rental housing developments made pursuant to this chapter, the
department shall enter into a regulatory agreement with the sponsor
that provides for all of the following:
   (1) Sets standards for tenant selection to ensure occupancy of
assisted units by eligible households of very low and low income for
the term of the agreement.
   (2) Governs the terms of occupancy agreements.
   (3) Contains provisions to maintain affordable rent levels to
serve eligible households.
   (4) Provides for periodic inspections and review of yearend fiscal
audits and related reports by the department.
   (5) Permits a sponsor to distribute earnings in an amount
established by the department and based on the number of units in the
rental housing development.
   (6) Has a term for not less than the original term of the loan.
   (7) Contains any other provisions necessary to carry out the
purposes of this chapter.
   (b) The agreement shall be binding upon the sponsor and successors
in interest upon sale or transfer of the rental housing development
regardless of any prepayment of the loan.
   (c) The agreement shall be recorded in the office of the county
recorder in the county in which the real property subject to the
agreement is located.
   50675.9.  Where the requirements of federal funding for a project,
or the requirements of the low-income housing tax credits used in a
project, would cause a violation of the requirements of this chapter,
the requirements of this chapter may be modified as necessary to
ensure program compatibility.  Where the requirements of federal
funding or tax credits create what are deemed to be minor
inconsistencies as determined by the director of the department, the
department may waive the requirements of this chapter as deemed
necessary to avoid an unnecessary administrative burden.
   50675.10.  (a) The department may designate an amount not to
exceed 4 percent of funds appropriated for use pursuant to this
chapter for the purposes of curing or averting a default on the terms
of any loan or other obligation by the recipient of financial
assistance, or bidding at any foreclosure sale where the default or
foreclosure sale would jeopardize the department's security in the
rental housing development assisted pursuant to this chapter.  The
funds so designated shall be known as the "default reserve."
   (b) The department may use default reserve funds made available
pursuant to this section to repair or maintain any rental housing
development assisted pursuant to this chapter that was acquired to
protect the department's security interest.
   (c) The payment or advance of funds by the department pursuant to
this section shall be exclusively within the department's discretion,
and no person shall be deemed to have any entitlement to the payment
or advance of those funds.  The amount of any funds expended by the
department for the purposes of curing or averting a default shall be
added to the loan amount secured by the rental housing development
and shall be payable to the department upon demand.
   50675.11.  If an appropriation is made by the Legislature for the
purposes of this chapter in an amount of twenty million dollars
($20,000,000) or less, the department may administer the funds with
guidelines that shall not be subject to the requirements of Chapter
3.5 (commencing with Section 11340) of Part 1 of Title 2 of the
Government Code.  If an appropriation exceeds twenty million dollars
($20,000,000), the department may administer the funds with
guidelines for 15 months, during which time the guidelines shall not
be subject to the requirements of Chapter 3.5 (commencing with
Section 11340) of Part 1 of Title 2 of the Government Code.
  SEC. 3.  Section 50880 of the Health and Safety Code is amended to
read:
   50880.  (a) The Legislature finds and declares all of the
following:
   (1) That there are more than 600,000 families in California who
face the enormous challenge of moving rapidly from welfare to work in
order to meet federal and state deadlines.
   (2) That a significant number of these families face substantial
obstacles in meeting these deadlines inasmuch as a vast percentage of
these families pay 50 to 80 percent of their welfare checks for
housing, live in counties with unemployment rates that are as high as
30 percent, cannot locate infant or child care because of no
availability or long waiting lists, and lack personal or public
transportation.
   (3) That approximately 1,500,000 children receiving Aid to
Families with Dependent Children (AFDC) will require child care when
their mothers begin private or public employment and that only four
out of every 100 slots in licensed child care centers are open to
infants.
   (4) That most of the 600,000 parents who will be required to work
lack training, and a high percentage lack a high school diploma, job
experience, and job retention skills in order to earn the income
necessary to sustain themselves and their children without welfare
assistance.  Studies demonstrate that a welfare mother in Los Angeles
with one toddler will need to find a job earning thirteen dollars
and seven cents ($13.07) per hour in order to provide housing, and
the basic necessities and health care.  A mother of two needs
seventeen dollars and ten cents ($17.10) per hour.
   (5) That in response to this complex problem facing so many
endangered families, assistance to families moving to work shall be
provided under the "Families Moving to Work Program" which shall be
operated as a component of the Multifamily Housing Program
established by Chapter 6.7 (commencing with Section 50675), through
which the Department of Housing and Community Development shall test
innovative strategies of providing affordable housing combined with
child care and a job training program.  The housing shall be located
on a main transportation system.
   (b) The Legislature intends that the funds included in Item
2240-106-0001 of the Budget Act of 1999 be used as an integral part
of a county's welfare plan as a means of assisting families
qualifying for CalWORKs benefits and experiencing the greatest
difficulty moving from welfare to work.  The Legislature further
intends for this to be a transitional program that will provide
focused, enriched resources to CalWORKs households during the period
of moving from welfare to work, and that upon the completion of the
program, the household's assistance will be terminated and then a new
CalWORKs household will be provided assistance in the Families
Moving to Work Program.  The Legislature intends that the department
may establish goals and timelines for moving from welfare to work,
and that broad criteria for this transition shall be applied to
households on an individual basis.
   (c) The Legislature finds and declares that the legislative
findings and declarations set forth in Sections 1 to 5, inclusive, of
both Chapters 1042 and 1043 of the Statutes of 1979, remain valid
and are applicable to the program enacted by this chapter.  The
Legislature finds and declares that there is an urgent need to
establish a program to design new living environments, part of which
will include social and economic programs, so that working parents,
jobseeking parents, and homeless parents can build productive lives
for themselves and their children.
  SEC. 4.  Section 50881 of the Health and Safety Code is amended to
read:
   50881.  This chapter shall be known and may be cited as the
Families Moving to Work Program.  The Families Moving to Work Program
shall be operated as a component of the Multifamily Housing Program
of the department (Chapter 6.7 (commencing with Section 50675)).
  SEC. 5.  Section 50881.5 of the Health and Safety Code is amended
to read:
   50881.5.  The definitions in this section apply to all activities
conducted pursuant to this chapter.  Except as otherwise provided in
this chapter, or unless the context requires otherwise, the
definitions in Chapter 2 (commencing with Section 50050) of Part 1
and Chapter 6.7 (commencing with Section 50675) also apply to this
chapter.
   (a) "Community housing development" means a development of 20 or
more rental or cooperative units on one or more sites, that includes
the social and economic features described in this chapter.
   (b) "Congregate housing" or "congregate housing development,"
means a new or rehabilitated large multibedroom structure in which
more than two families share common living areas and child care,
cleaning, cooking, and other household responsibilities.
   (c) "Sponsor" means any nonprofit corporation, cooperative, or
local public agency, or any combination thereof, including limited
partnerships in which the managing general partner is an eligible
nonprofit corporation.
  SEC. 6.  Section 50882 of the Health and Safety Code is amended to
read:
   50882.  (a) The Families Moving to Work Account is hereby
established in the Rental Housing Construction Fund.  The account
shall be organized into subaccounts as provided in this chapter.  All
of the following moneys shall be paid into the account:
   (1) Any moneys appropriated and made available by the Legislature
for the purposes of the account.
   (2) Any moneys that the department receives in repayment or return
of loans made from the account, including any interest on those
loans.
   (3) Any other moneys that may be made available to the department
for the purposes of this chapter from any other source or sources.
   (b) Notwithstanding Section 13340 of the Government Code, all
money in the account is hereby continuously appropriated to the
department and shall be utilized for the purposes of Article 1
(commencing with Section 50880) to Article 4 (commencing with Section
50893), inclusive, including administrative expenses of the
department for the implementation and operation of the programs
created by this chapter.  All interest or other increment resulting
from investment or deposit of moneys in the account shall be
deposited in the account, notwithstanding Section 16305.7 of the
Government Code.  Moneys in the account are not subject to transfer
to any other fund, except as set forth in this chapter, pursuant to
any provision of Part 2 (commencing with Section 16300) of Division 4
of Title 2 of the Government Code, except the Surplus Money
Investment Fund.
   (c) At the time funding availability is announced by the
department, the department may apportion funds available for loans
between community housing developments and congregate housing
developments.  The plan for apportioning funds may include a priority
for funding loans for new construction, acquisition and
rehabilitation, or rehabilitation.
   (d) Notwithstanding any other provision of law, on or after July
1, 1996, the unencumbered account balance and reserves shall be
transferred out of the Family Housing Demonstration Account, but
shall be retained within the Rental Housing Construction Fund.
   (e) Notwithstanding any other provision of law, the funds
transferred to the Rental Housing Construction Fund pursuant to Item
2240-106-0001 of the Budget Act of 1999 shall be transferred into the
Housing Rehabilitation Loan Fund to be used only for the purposes of
this chapter.  Repayments shall be made to the Housing
Rehabilitation Loan Fund and may be used for any eligible purpose of
that fund.
  SEC. 7.  Section 50887 of the Health and Safety Code is repealed.

  SEC. 8.  Section 50888.3 of the Health and Safety Code is amended
to read:
   50888.3.  (a) Housing assisted pursuant to this chapter shall be
subject to the following provisions:
    (1) For the period during which the development benefits from
assistance provided pursuant to this chapter, and not less than 10
years, households moving into assisted units must be comprised of
CalWORKs recipients and their families.
   (A) Following this period, occupancy shall be limited in
accordance with the provisions of the Multifamily Housing Program
established by Chapter 6.7 (commencing with Section 50675).
   (2) Child care must be available to all households living in
assisted units.  The child care must be available onsite or in close
proximity to the housing.
   (3) Case management services must be available to all households
living in assisted units commencing upon initial occupancy and
continuing for at least three months following termination of the
program assistance provided to these households.
   (4) The assistance provided to individual households shall be for
the purpose of assisting them in moving from welfare to work, or to
retain employment as determined necessary by the county welfare
department and consistent with the services provided by the county's
CalWORKs program.
   (5) The regulatory agreement entered into between the department
and the sponsor shall contain provisions (A) for requiring
termination of program assistance consistent with the requirements of
the local welfare reform plan and CalWORKs; (B) for expeditiously
transferring assistance to a new CalWORKs recipient household, once
assistance has been terminated for a household that no longer
qualifies for the assistance; (C) for grievance hearings and other
resident protections which ensure reasonable security of occupancy;
(D) to ensure that if an eligible household's income exceeds the
standard pursuant to which it was accepted for tenancy, that fact
alone shall neither constitute cause for the eviction nor be a
violation of the sponsor's loan agreement; (E) for requiring sponsors
to collect and report to the department such information as the
department deems necessary for program evaluation purposes; and (F)
any other provisions necessary to carry out the purposes and
requirements of this chapter.
   (6) In evaluating projects for funding and to permit assessment of
the efficacy of various housing models, the weighted underwriting
and evaluative criteria shall give consideration to ensuring that a
variety of project types receive funding.
   (7) (A) Community housing developments shall include all of the
following features and criteria:
   (i) A jobs and economic development component.
   (ii) A child care center and play area adequate in size to serve
the residents of the development, and may also serve the children of
nonresidents of the development.
   (iii) A community room, which may also be the child care center.
   (iv) Adequate laundry facilities.
   (v) Other features as appropriate.
   (B) The jobs and economic development component of a community
housing development shall consist of a program of job placement and
training for residents which shall be implemented commencing upon
initial occupancy of the development.  The program shall be based on
a consideration of existing potential employment at nearby facilities
through publicly assisted or other job training or entry level
employments programs, as well as employment in the management and
operation of the development, including the child care center.  The
economic and development component shall be subject to the department'
s approval and shall be memorialized as a rider to the regulatory
agreement.
   (8) The housing must be on a main transportation system.
   (9) Sponsors shall provide evidence that the proposed development
is consistent with the Welfare Reform Plan required pursuant to
Section 10531 of the Welfare and Institutions Code, as adopted by the
county board of supervisors.
   (10) If the CalWORKs program ceases to exist or is modified to the
extent that it becomes financially infeasible for developments
assisted pursuant to this chapter to comply with the requirements of
this chapter, as determined by the department, the department may
modify these requirements to the extent necessary to preserve the
financial feasibility of the developments.
  SEC. 9.  Section 50888.5 of the Health and Safety Code is repealed.

  SEC. 10.  Section 50888.7 of the Health and Safety Code is
repealed.
  SEC. 11.  Section 50889.5 of the Health and Safety Code is
repealed.
  SEC. 12.  Section 50893.5 of the Health and Safety Code is
repealed.
  SEC. 13.  Section 50893.7 of the Health and Safety Code is
repealed.
  SEC. 14.  Section 50893.9 of the Health and Safety Code is
repealed.
  SEC. 15.  Notwithstanding any other provision of law, the funds
transferred to the Housing Rehabilitation Loan Fund pursuant to Item
2240-107-0001 of Section 2.00 of the Budget Act of 1999 shall be
utilized for the purposes set forth in, and shall be administered
through, the Multifamily Housing Program established by Chapter 6.7
(commencing with Section 50675) of Part 2 of Division 31 of the
Health and Safety Code, as added by this act, subject to the
following special conditions:
   (a) The funds shall be used for multifamily housing rehabilitation
or acquisition, or rehabilitation and acquisition.
   (b) First priority for the funds shall be the conservation of
affordable housing for existing tenants.
   (c) The department may use up to four hundred thousand dollars
($400,000) of the transferred funds for program administration.
